Question 17 Other things being equal, which of the following industries has the smallest Lerner index?
a. Perfect competition b. Monopolistic competition c. Oligopoly d. Oligopsony e. Monopoly Question 18 Suppose that the price elasticity of demand for the output of an entire industry is −2, and the price elasticity of demand for the output of an individual firm in that industry is −10. The Rothschild Index suggests that this industry: a. has a great deal of market power. b. is a near monopoly. c. is highly concentrated. d. consists of a large number of firms producing similar products. e. None of the above. Question 19 The Rothschild Index for an industry is 0.25. If the demand for the output of the entire industry is unit elastic, the price elasticity of demand for the output of an individual firm is: a. –0.25. b. –0.4. c. –0.75. d. –4. e. None of the above. Question 20 The Dansby-Willig Index measures the potential for a change in: a. a firm’s total cost. b. a firm's revenue. c. a firm's profit. d. social welfare. e. None of the above. Question 21 Which of the following is most likely to exploit economies of scope? a. Vertical integration b. Horizontal integration c. Conglomerate merger d. Multinational merger e. Hostile takeover
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